Starbucks Returns To Office, Shopify Blocks Bots & Kraft Heinz Seeks Couples Therapy

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Learn more@ocampo capital.com hello, you are listening to Omnitalk's Retail Fast Five ranked in the top 10% of all podcasts globally and currently the only retail podcast ranked in the top 100 of all business podcasts on Apple Podcast the Retail Fast five is the podcast that we hope makes you feel a little smarter, but most importantly, a little happier each week too.

And the Fast 5 is just one of the many great podcasts you can find from the Amitak Retail Podcast Network alongside our Retail Daily minute read each day by the one and only Chris Walton, which brings you a curated selection of the most important retail headlines every morning and our Retail Technology Spotlight series which goes deep each week on the latest retail technology trends.

It's July 16, 2025.

I'm one of your hosts, Sam Mazing.

And I guess Now.

And I'm the one and only Chris.

Walton, you are, you are.

And we are here once again to discuss all the top headlines from the past week making waves in the world of Omni Channel retailing.

And Chris, joining us today as they do once a month, every month, we have managing directors from the A and M consumer and retail group, Chad Lusk and David Brown.

Welcome Chad.

David, we're so excited to have you.

You're typically our end of the year guest so I love that.

This is like our, our mid year preview, the July preview of what might happen on the end of the year podcast.

Chad the Lusker.

Chad Lusk, how are you doing today?

Are you ready for this show?

I'm doing great guys.

It's good to be back.

Yeah, this is a little meta.

I mean last time I was on.

Was the end of year award show.

The Omnis as now dub.

Thank you very much.

But I was actually sitting in for David, not alongside David.

That's true.

Using his mailed in envelopes to unleash the winners.

So that's right about three years since David and I did this together.

So you know we lit that show up.

We'll, we'll do it again here today.

Yeah, absolutely.

I think of you every time I pick up an envelope, which is rare Chad, but every time those white envelopes I pull one out, I think about it.

Chad, before we go to David's introduction, quick background on you for those of our listeners who might be joining us here for the first time if you don't mind.

Yeah, absolutely.

Partner Managing director out of Chicago background pre consulting here as a multi time Chief Marketing Officer, Chief Strategy Officer across both CPG and retail today.

Nowadays I spend most of my time on broad scale transformation with a real focus on growth and commercial excellence.

Wonderful.

We have some stories for you today Chad that we're quite excited to discuss.

David Brown, another Omnitalk veteran.

David, why don't you give our listeners a quick background on you your role out there at am.

Sure.

Happy to Ann.

Great to be here.

I lead the consumer retail group along with a couple others lifetime professional services started in banking and now 25 plus years and consulting with the red thread of being retail kind of optimization programs whether that be kind of turnaround, growth, etc.

Really working across the whole value chain.

So super excited to be here.

Very sorry I missed the year end show but this will be great prep for, for this year.

It was like you were here in spirit David, for sure.

Like we did it.

We, we, we did skip a beat with you.

I mean you're historically on the year end show every year.

And it felt like you were still there, Chad job representing your, your point of view.

And I've never heard the term red thread before, so I might have to, might have to borrow that if you're okay with it, of course.

Well, I will attribute it to you as well.

All right, Ed, should we get started with this week's show?

Let's do it.

Let's do it.

All right.

In this week's Fast5, we've got news on return to office mandates from both Starbucks and Target this week.

Yesterday's inflation report, Supermarkets reportedly losing ground with younger shoppers shopify setting boundaries for AI agents on its merchant sites.

And AWS's Danielle Stropa stops by to announce this month's retail tech startup of the month for the month of July.

But we begin today with what may be the worst catch up secret.

Chad, I'm so glad you're on the show this week because I know you're going to get that reference.

The worst ketchup secret in history.

And yes, we promised a headline for Chad.

Here it is, headline number one.

Kraft Heinz is preparing to break itself up a decade after an infamous merger of the two biggest names in packaged foods that was orchestrated by Warren Buffett and Brazilian private equity firm 3G Capital Partners.

According to the Wall Street Journal, Kraft Heinz is planning to spin off a large chunk of its grocery business, including many craft products, into a new entity that could be valued as much as $20 billion on its own, according to people familiar with the matter.

That would leave a company housing goods such as sauces and spreads like Heinz namesake ketchup and Dijon mustard brand Gray Poupon.

The company has given priority to its faster going offerings like hot sauces, dressings and condiments, which are more in line with consumer preferences than processed lunch meats and cheeses.

It hopes the two separate units could be in total more than KRAFT Heinz, roughly $31 billion market value currently.

Chad, what is your assessment of the Kraft Heinz breakup and what is the potential value creation given as the rationale?

So first of all, it was a pretty big week for food M and A overall, I believe this was just a day after Ferrero announced the deal to buy Kellogg cereal division.

Right, Listen, in this case, the, the massive devaluation that's occurred since the Kraft Heinz merger is, is stuff of legend, right?

So am I surprised to see this like, especially in this current era of pretty massive portfolio shaping and reshaping across food and Bev cpg No, not at all.

Your question is, will it work?

Right, Right.

You know, listen, the theory of M and A is painfully simple.

When you break it down, even though it's kind of painful to make work, you need to make the move that adds value.

And so the numbers that are being stated out in the article are, wow, we break it up, it's worth more than it is together.

How does that work?

Right.

So you know it's the inverse of an acquisition deal, right.

If you're acquiring, you're betting on being able to disproportionately grow something more or faster than it otherwise could or grow the same at a higher profit margin.

Otherwise you're paying for it in the purchase price.

That's what Ferrero is banking on by taking those slower moving cereal brands from kellogg.

That's what J.M.

smucker bet on with Hostess, you know, countless examples.

If you're divesting and breaking things apart, you're getting rid of the boat anchors that others could do better than you, right?

In this market, growth is hard.

Folks have negative comps.

So you're seeing this a lot.

It's shrink to grow, Right.

Could someone else do better with Oscar Meyer and Lunchables and Mac and Cheese?

When, when these brands aren't succeeding at Kraft Heinz, you know what?

Probably, right?

The large conglomerate CPGs, you know, they take off their pants one leg at a time like the rest of us.

They have to allocate resources like anyone else.

So, you know, these brands, they fall out of favor, kind of a death spiral internally.

So someone who can take them, make them higher priority, take the brand equity, invest in marketing, invest in innovation.

It's been shown numerous times that it works and that's what they're banking on here.

Which does make sense if there's a willing party, which is always the other side of it.

But you know, the, the breakup, I mean, it's just a couple years ago in terms of what Kellogg did, you know, into Kellanova and Kellogg, and now that's selling off to Ferrero, who's going to try to put it on speed.

You know, it's, it's, it's, it's a ten year journey here.

That, that reached kind of an inevitable conclusion and we'll see where it goes from here.

Yeah.

Chad, how much do you think like regulation is going to impact?

You know, in the past you had these mergers and acquisitions or divestitures happening.

Do you think that there's less opportunity now because of the requirements to change ingredients or remove artificial flavorings and that kind of stuff?

In this kind of category that will impact that.

I don't know that it has an impact specifically on a, on a deal like this.

I mean, listen, your food industry is on watch right now when it comes to that, right?

And you know, that's just becoming, you know, at this point some degree of table stakes of how the industry needs to, to react going forward.

I'm not sure that individual, especially brands in this kind of catalog that, that ultimately is going to be a deterrent or an accelerator on M and A activity.

And David Brown, where do you see the opportunity here from this?

You know, as somebody who's worked in professional services for a long time, if, if Kraft Heinz is coming, they're, they're the separate companies now.

What are some of the key things that you think could be, or actions that could be taken right now to help the success of the future?

I agree with a lot of what Chad said and I think there's a couple other angles.

One, I think what we're seeing now is the dismantling or the, the proof point that a lot of the 3G work just really didn't work.

Right.

That you know, all of these billions of dollars of cost synergies that were supposed to happen really haven't worked because of either the complexity of the organizations or as Chad said, the resource allocation, etcetera, etcetera.

So I think the opportunities as you split these apart is really going to be to be laser focused on what matters for the consumer, right?

So you pick a strategy and then you ruthlessly execute against it.

It's really hard to pick, you know, six different strategies within an organization and execute it against it effectively because it just doesn't work.

Right.

So I think that's what we're seeing more than anything here.

And as you kind of divest and be able to get more focused, I think the other interesting thing that I haven't seen in any of the press on any of these deals yet is as they go to either get sold to foreign entities or foreign entities are, are looking at them, the regulations do matter, right?

You know, there's a lot more ingredients that are limited outside of the U.S. than inside the U.S. that's a whole different debate that, that we could have.

But also the, you know, the ongoing tariff situation and like if you start moving, you know, kind of manufacturing plants or you know, now you're re importing cereal or Mac and cheese or, or whatever it is, you, you could be talking about drastically different price points, right?

So how that plays out on the valuations, right?

And, and Kraft Heinz has had this innovation center focused on product design and development for 75 years or something now, too, but likely focused on the US Market and what they're doing here, not what those regulations are probably going to be when you're looking at overseas buyers.

Chris Walton, round us out here.

What else would you add to what David and Chad had to say?

Yeah, I don't, I don't, I don't think I'd add much, but I do have an analogy that I use to think about these things.

You know, I think of it like, you know, whenever it was what they say was 15 years ago that this, this merger happened.

You know, to me, it's just like, you know, it's like a marriage and the marriage didn't work out and they need to separate and they, they're not as sexy, they're not as good looking, they're not as happy as they were when they were apart from each other.

And so now they've got to separate and potentially get back into the gym and start working out and finding the happiness in life.

And potentially there's another acquirer down the road.

And maybe to David's point, that Acquirer is an international company that is farther ahead on understanding the different puts and takes with, you know, refining product formulations and all that.

So that, that's how I look at this.

It's just, you know, the natural progression that, that happens for a lot of folks in many aspects of life.

Except for you, Chris, who's gotten sexier over time.

Oh, thank you, Chad.

Thank you everywhere on this podcast, Chad.

Thank you.

Thank you.

All right, well, let's move on on that note, because I've got riding high already for this to start today off.

All right, headline number two, both Starbucks and Target issued return to office orders this week, according to local Minneapolis NBC affiliate Carol Evan Shout out to Carol Levin.

Target's Chief Commercial Officer Rick Gomez said that starting September 2, he's asking all team members to work in person at least three times a week, adding that there will be flexibility, including allowing employees to decide which three days to work in person.

Sounds a little half pregnant to me.

Target reportedly doesn't mandate its employees to work remotely or in person.

Rather, individual leaders make the decision based on what's best for their teams.

Starbucks, in contrast, said employees will have to work in the office a minimum of four days a week, Monday, Tuesday, Wednesday and Thursday, starting in October.

The new requirement, which is up from a previous one of three days, applies to workers in Starbucks, Seattle and Toronto support centers.

As well as North American regional offices for workers who decide to opt out and leave the company.

Instead of meet the new four day requirement, Starbucks is offering a, quote, one time voluntary exit program with a cash payment, end quote.

David, lots of companies are instituting backed office policies this week.

Some mandating four days like Starbucks, others like Target, keeping it loose as far as when people need to be in the office for their three expected days.

Is there a best practice across the industry at this point or how should retail executives think about this challenge?

Yeah, this is a super interesting one, Chris, to me.

Like, I don't know if there's a best practice.

I will say this, that the majority of my clients, and I think our clients are moving back towards this.

Right.

And you know, being in the office more, I don't think it's going back to five days a week anytime soon.

I do think there's been some lessons learned about that.

You can have some remote workforce and there's a work life balance that just naturally comes with not being in the office five days a week.

But on the flip side of that, I will tell you that the clients that I see that are in the office more, collaborating more, just being in the same room to make big decisions are more productive, they're more efficient, and I actually think they make better decisions because there's just something about the human element that is missing on when you're, you know, three, four, five days a week on, on zoom calls, you don't build relationships as well.

You really can't have as active a debate where you're, you know, getting super demonstrative or whatever in the room, you know, being very Italian and talking with your hands.

But I never thought about that.

Yeah, yeah.

So I'm surprised it's taken this long, quite frankly.

Kind of COVID But I do think if I was to think about kind of a best practice and if it was my company, I would probably have three, four days a week with some flexibility because I think there is huge value to being in person now.

Do I hate traveling as much now again as I do and being away from the family?

Probably, sure.

But I do think for the companies there's value.

Yeah.

There's puts and takes with every job really.

At the end of the day.

David, let me ask you, because we put both of these headlines in on purpose, the Starbucks and the target dichotomy in terms of how they're handling it.

Do you think, I'm curious, do you approve of one approach over the other?

Say Starbucks saying you have to be in these four days.

Whereas Target saying it's up to the individual manager's discretion which three days of the week they want to be in.

How do you think about that?

Is there a right or a wrong.

Way to do that?

Yeah, no, I do think there is a right way.

I do think if you're gonna, you know, pick some minimum number of days, you have to define those days.

Otherwise the standardized three days.

Right.

You know, that leaves 40% of the time.

And if you do the math, and I'm not gonna do the math right now, but you, you could end up with one day a week overlap.

Right.

And you know, what, what have you really accomplished there then?

Right.

You know, set the operating rhythms of the company and, you know, set a series of meetings where people can be together.

And I'm not a huge advocate of meeting just for meeting sake, but like, but if you're going to have the benefit of people being in the office, you actually have to have them in the office together.

So I would mandate, you know, whether it's Tuesday to Thursday or whatever, but, but I, I would go to the mandate route.

Yeah.

Otherwise you're on, on.

You're in the office on Zoom with many people still.

And I saw you shaking your head.

Do you agree with that?

Yeah, I mean, I think it's just, it seems like it's actually more work when you don't specify what the days are like on top of just what David was saying.

Trying to make sure that you're getting Zoom calls coordinated when people are not in the office.

Like now you have to have that extra layer for each one of those managers to figure out.

And I just think, like, that it also seems a little disruptive to the whole organization too.

Like, I think the Starbucks approach makes much more sense.

Like, you're not just working at a Target, you're not just working with your team.

Like you're working with teams throughout the organization, hopefully.

And so I think standardizing it makes a lot more sense.

Yeah, I 100%, I, I 100% agree with you and I think, I think you said it very well.

Chad.

Chad, what's your take?

Do you have any other light you'd share on this, given your personal experience in working with retailers across the industry?

Yeah, I mean, I'd agree with everything David said in terms of the merits and values and what we've observed and experience of, of in person work.

Right.

You know, easier to maintain relationships remotely, harder to build new ones, decisions get made faster.

And quite frankly, psychologically.

Right.

People have feelings of Higher collaboration that is less transactional when they're in person.

We're generally social creatures, so I would also imagine in person leads to higher engagement, more connection and loyalty to the job and company.

Higher satisfaction.

Don't have the data, but, you know, as you guys are debating Starbucks versus Target's model and which is better and you know, kind of the practicality of logistics aside, you know, I, I think what I'd add is like corporate cultures are different and policies need to align with the values and cultural norms of that company.

Right.

They have to balance the productivity with recruitment and retention.

It can't be viewed in a vacuum.

Right.

So how employees are treated and respected and valued in other ways than just office policy.

Right.

So, you know, maybe an illusion of flexibility when corporate culture is way more restrictive.

Right.

Can just be lip service.

Or if you do have a more restricted mandatory policy, but employees do feel valued and respected, it can work and make sense.

So I would just, you know, continue to advise companies to make sure that the policies that they're doing aligns with their overall culture and values.

Yeah.

The point I'd add on top of that, and I'm not, I've been thinking about this a lot.

I'm not sure exactly how to articulate.

So you guys will need to give me some space here and maybe even help me out to articulate it.

I think in a D. In addition to the culture, there's also the work that is required from the company itself inside of that culture.

And so, you know, I look at Target and the commercial team, that's basically the merchant and the inventory planning teams, the planning and allocation teams.

And you know, I, as I was stepping back from this story both for Starbucks and Target, I was like, okay, yeah, if your job is to put products in front of customers in physical spaces, it probably is important for you to work together to get into the stores together to understand that, to be in charge of that, to make it work the best way.

Because my guess, and from what I'm hearing from a lot of people, and I've been hearing this for the past two or three years, the remote work has been a big reason why we're seeing all these pictures of Targets out of stock shelves throughout social media constantly.

And that's because I think these teams are not together working through the issues and not, you know, going down to the store right next door and being like, look, what are we doing about this?

You can't get together to solve that problem in a way that's, that's easy and efficient.

So I, that's the.

Sorry for not articulating that as well as I normally would try to do, but I think there's something to that in terms of the work that has to be done as well.

Chris, you bring up a really good point, too.

It's like, how is this being measured, too?

Like, I, I don't know.

Like, are we, or is it just simply, like, productivity that's being measured once people are coming back to work?

But, like, are there teams at these, at these eight, these companies who are really investigating, like, what positives are we seeing from this?

Like, how do we measure the success of our organizations after being able to do that?

Is it just full shelves or, you know, what else are they tracking to make sure that they.

This is the right move, too?

Well, that's, that's a pretty easy measurable metric.

You know, like, do we see in stock improvement once we force the teams back in the office?

I mean, that's, that's one.

Can you correlate it directly?

No.

Is it required?

Not necessarily, but it probably doesn't hurt.

Right.

All right, let's move on to headline number three.

Tariff driven inflation may now be starting to emerge.

According to the Associated Press, inflation rose last month to its highest level since February as President Donald Trump's sweeping tariffs push up the cost of a range of goods, including furniture, clothing, and large appliances.

Consumer prices rose 2.7% in June from a year earlier, the Labor Department said on Tuesday, up from an annual increase of 2.4% in May.

On a monthly basis, prices climbed 0.3% from May to June after rising just 0.1% the previous month.

Excluding the volatile food and energy categories, core inflation raised 2.9% in June from a year earlier, up from 2.98% in May.

On a monthly basis, it picked up 0.2% from May to June.

David, I hope you were keeping track of all those percentages as I was reading them.

What impact do you predict tariffs will have on retail for this upcoming holiday season?

Yeah, so it's a great question.

And, and I think the short answer is, don't know yet.

We're getting dangerously close.

But let's be honest, without getting into the whole political discussion, President Trump's playing a giant game of chicken with the rest of the world.

Right.

In terms of who's going to blink first, because I think nobody believes that, you know, high tariffs across the world are a good thing.

Right.

And if there isn't resolution, I think it's going to have an enormous impact on the holiday season, you know, across all categories, whether it's luxury goods, toys, apparel, it really doesn't matter.

Everything is going to be affected.

And you know, there's a, it's just a share of wallet issue.

Right.

People have so much money to spend on holiday gifts and family excursions and, and everything along those lines.

And, and I think you're going to see a rebalancing of how those dollars get spent to more experiential things as opposed to less material things if they still end up being kind of 20, 30, 40% more expensive.

But nobody could tell you right now with any certainty what the tariffs are going to be when we get into the heart of the holiday season.

And anybody that says they can is, is, you know, either lying or hopeless, hopelessly optimistic.

Right.

Or, you know, and who knows what products will be on shelves.

Chris, you were just talking about this in the last headline, like we're already seeing out of stocks at Target and other places.

What do you think as a former merchant in particular, like, what do you think we're going to see once we head into the holiday season as a result of this?

Yeah, I agree with David.

Like, we don't know what tariffs will be in place during the holiday season, but I do think there are some, you know, things that we can potentially bet on.

And everyone knows I'm on this show, knows I'm a betting man if you look at my Kentucky Derby track record.

But, you know, I think if I was betting and looking at what's going to happen, I think there's, there's two things I'm, I'm pretty confident about.

I think, one, I think this will be the least well stocked shelves are across all of retail that we've seen for a long time.

And so, and so that then therefore means the proclivity we've seen for consumer spending to get pushed up into October by way of Prime Day, which kicks it off, is going to happen even more this year because people are going to need to get in there and get what they can when they can get it for those gifts and for the holidays.

So those are the two things I would bet on.

It's not going to be great stock position because people are probably waiting to decide where to place their bets, how much they're going to place.

They just don't know yet.

At least that's what I'm surmising.

But you guys, A and M group can probably answer that better than I can.

But yeah, I think you're going to see people trying to Grab things as quickly as they can on deals early in the season too.

Yeah, and I'm curious too, you know Chad, we'll go to you next.

But I also wonder like the mass retailers that we're talking about, the Walmarts, the targets, you know, the, these guys are prepared more or have the ability to be more agile when it comes to these types of things.

I'm wondering what the small, medium sized businesses are going to do because they cannot tolerate the flux, the constant fluctuation.

And I think that also impacts, you know, when it comes to gift giving and holiday times of year.

You know, are we in the sea of sameness where it's like your options are whatever Target and Walmart and Amazon still have left in stock and that's what you're going to get?

There's no, there's, you know, we had Chris and Sevilla on the show not too long ago talking about how it's the sea of sameness.

We're going to see, you know, all, all beige goods.

We're not going to see the, the like highlight pop of color in apparel or accessories that used to be that intriguing and fun, more personal kind of gift.

So I, I'm curious Chad, like what do you think shoppers are going to see?

Are they going to go the way of what David's saying where you know, they're just going to have to cross their fingers and hope that they can get the best thing possible or are there things that your clients or that other retailers and brands can be doing now to kind of help still give people that thing to shop for that unique gift?

Yeah, really, really great avenues that, that you guys have laid out.

So if I first answer from kind of the advisory standpoint and then maybe the prognostication standpoint, listen with, with respect to tariffs and, and actually predating that to the last round of, of hyperinflation, what, what we're advising our clients is first minimize the impact as much as possible.

Right.

Leave no stone unturned.

When it comes to cost reduction.

You have to approach it there first before even testing how much is too much for the consumer to bear in pricing.

Like a hard look of costs across the board, not just in cogs is, is mandatory but then as far as pricing and those that will be more successful in that then have the, the ability to, to have more flexibility to your point and you know, when it comes to pricing like especially at this stage, it has to be precise.

Right.

Looking at consumer price elasticities buy skew being selective on where your hikes Versus holds are blanket moves are going to be tough to do again more broadly or people are going to find themselves out of the market.

Right.

I mean, as far as going into the back part of the year here, I mean, I agree.

Listen, we can't predict exactly where things are going to hit and how.

I think we are going to continue to see upward movement in kind of the staples and essentials categories.

So.

Okay, grocery, personal care, pet, you know, and private labels, not exempt from these.

So I think we'll, we'll likely see them move together.

And where you may see more holds, especially for holiday season, here is in your more traditional gift giving discretionary spend areas like apparel and it'll be tough but, but electronics, right.

They're too important for the season.

And I love what David said.

We've already seen shifting last year toward experiences versus goods on holiday gift giving.

But I also agree, I mean I, I think it's important that where prices do rise, I expect significantly lower inventory positions for those items at holiday.

Right.

I think retailers will be more content to sell out, you know, than be left with tremendously expensive inventory piles.

And so, you know, it'll be those that can manage the SKU balance with how they're able to optimize cost and, you know, pointed pricing actions relative to inventory for the season.

Man, it's a tricky, it's a tricky, tricky balance.

Yeah, well said.

I don't, I don't miss being in those rooms making those decisions one bit right now, especially during, with this climate.

All right, well, let's bring Danele onto the show to announce July's Retail Tech Startup of the Month.

Foreign let's give a big Omni Talk welcome back to AWS's Danele Stropa.

Danielle is the worldwide technical lead for AWS Partners in Retail at Amazon Web Services, where he drives the technical strategy for AWS Partners in Digital Commerce, Customer Engagement and Generative AI.

Danella, it is hard to believe that it has already been one month since we handed out our first Retail Startup of the Month award.

But that was June.

Now it's July.

So who is this month's Retail Tech Startup of the Month?

This month peak is Braia AI and I'm really excited to share what they're doing in the industry and how they are revolutionizing content creation for brands.

So Bria B R I AI.

Correct.

Yeah, Bria AI.

What do they do?

Why is it so important in your mind and what kind of sets them apart from other players in the space?

So Priya is a visual Generative AI platform.

However, they are not just another text image generator.

Right.

We've seen many of those.

They built what they called build their first platform and that really focuses on three key aspects, three key things.

The first one is bringing commercial value to their customer, so helping businesses creating on brand content that actually drives results.

The second one is ease of integration.

So their technology is available in different or is accessible through different mechanisms and that can plug right into existing workflows.

So ease of adoption as well.

The last one, which I think it's huge for enterprises, is really the fact that the content that Praia creates is fully compliant, it's safe to use.

Their model is trained on properly licensed data and commercial data.

So that's a huge aspect for enterprises.

One thing that I think really sets Priya apart from the rest is the ability to maintain brand integrity.

They have a feature called tailored generation where basically customers brands can take Praia's model, they can fine tune it, adapt it so that it creates content specific for a brand for a product.

So they're not just say messing around with the actual products, they place the actual products in different contexts, in different scenarios with proper lightning and shadows maintaining the proportions.

So it's really like having a professional studio at your fingertips, just more scalable and faster.

Danielle, for an example with this might be product images, might be different ads that you're creating for retail.

Retail media, is there any other example of this that you could provide?

Yeah, I mean oriented media is, is definitely one of the, one of the use cases, social media campaigns and any kind of communication or customer engagement that brands are doing.

But also the, the products, the product detail pages.

Right.

So that's something where it's often the case where you see products in a lifestyle scenario so it can really relate with users on a more personal level.

Danielle, let's get you out of here on this.

What are the long term implications of AI image generation when you think about it broadly across the industry, for the retail executives that are listening, what do they need to know in terms of why this is an important topic and how things are going to change in this direction?

Content creation, content generation is time consuming, it's expensive when you need to do it at scale for thousands of products and possibly even multiple times a year when you have different collections, different seasons.

Here we are talking about reducing dramatically the cost of creating this type of content, achieving faster time to market and the ability to create personalized content at scale, all while maintaining that brand consistency.

Imagine being able to create thousands of product images for an e commerce store in minutes instead of weeks, or being able to run localized social media campaigns across different markets without incurring into huge production cost.

So I think what Brea is doing here is really addressing a key challenge in the industry.

It's not just a cool technology that they have built.

It's a practical solution that can easily be integrated into existing system, again which is crucial for large scale adoption and the focus on commercial value.

Brand integrity is something that is key for enterprises and for that commercial use.

So I think Bria is really one of those startups that is worth keeping an eye on in this retail tech space.

Well, you heard it here first folks.

Bria AI put it on your radar screen.

Thanks, Danielle.

Thank you.

Okay, headline number four Supermarkets appear to be losing ground with younger shoppers, according to Grocery Dive.

Traditional supermarkets are falling out of favor with younger generations, with people in those cohorts increasingly turning to discount retailers to buy groceries, according to survey data published Tuesday by the feedback group Gen Zers.

Millennials and Gen Xers.

Yes, shout out to all those Gen Xers out there are most partial to Walmart, with more than a fifth of people in each of those groups who participated participated in a poll the research firm fielded this spring, saying they most recently shopped for food at the mass retailer.

Those generations also showed a preference for Aldi, with Gen Z' ers especially likely to have made their latest grocery shopping trip at that chain.

22% of shoppers in that group shop for groceries, most recently at Aldi, the same proportion that did so at Walmart.

While supermarkets might be losing ground with younger shoppers, they remain popular with older consumers, the survey found.

I love how the the survey said older consumers, 28% of baby boomers and 31% of people in the silent generation.

We got to come up with a better name for that generation than the silent generation.

Well, they said they shop for groceries most recently at a supermarket ahead of other formats.

Walmart came in at number two among members of both baby boomers and the silent generation, well ahead of Aldi.

Chad, what advice would you have for regional grocers as they appear to be losing share with the younger generations but still attracting boomers and the silent generation?

I'm not sure first of all, where I fall into all of this I generation.

Wait, what, what are we calling me again?

I don't know.

You know, I, I love when predictive data starts to actually play out in the, in the market.

And what I mean by that is we, we can go back Shameless plug, but we can go back to some of the learnings of within our A and M consumer and retail group.

We do a semi annual consumer sentiment survey and we look at these sort of buying trends and look at all kinds of different spreads and segments of the population, household income and, and there's a lot of generational preferences that, that have popped when it, when it came to grocery over our past couple of surveys.

So you know, on the whole, younger grocery consumers are more price sensitive and they're more likely to look and try out different products and assortments.

They have a particularly high confidence in private label.

They're interested in quality of goods, but they're the ones who disproportionately see a quality boost in store brands.

So that trade off for the better price isn't as significant to them because they feel like they're getting quality.

And about half say they're likely or very likely to try new brands that they see especially when they provide better for you health benefits.

That's the playbook, right?

And like these are the areas that Walmart and Aldi are winning at, right?

Discount prices, high private label penetration with good quality that they invest in healthy assortment options.

And this is where we can see that, you know, many regional grocers are falling behind.

So look no further to the data and preference and purchase drivers of these generations and the playbook is laid out in front of you.

Yeah, Chad, I'll give you another plug because in addition to your consumer sentiment survey, you guys also released a report on space planning which I got thinking about in regards to this conversation too.

And so, you know, to answer the question from that perspective in terms of the advice that, you know, I personally would give to the regional grocers would be, and I got it from, you know, talking to your team about that report is you gotta map out your current strengths and weaknesses as a grocer and you gotta do it by category.

And then you have to ask yourself the hard question of how are those categories gonna be trending five to 10 years out and placing bets again on which trends you think are gonna be most impactful against your overall value proposition.

You know, is it gonna be E commerce, Is it gonna be fresh food, Is it gonna be food is medicine as the trend?

And you need to get to work.

You need to get to work designing your in store experience and your digital experience, not just for today because I feel like a lot of people are just designing both those experiences for today.

You gotta be designing it five to 10 years out.

That's what I think.

And that's why Walmart's killing it on both ends.

They're killing it with the younger shoppers and the high income demo, which is why they're so strong right now.

But I don't know, David, anything you'd add here?

Yeah, the only thing I'd add is, I think where you were going, Chris, is that I actually think that they're just a better experience.

Right.

Like if I would, I just think about like the, gotta amplify that.

The three or four options that I have here in my little hometown of Truckee, California.

You know, we have a Raley's One Market, which was the first Raley's One Market, which is an amazing experience.

We have a brand new grocery outlet which is a way better experience than the Safeway that is right across the street.

And it's better prices, et cetera.

So you know, why wouldn't I go shopping someplace that has a better experience and lower prices?

I mean it's, it, it, as Chad said, it's simple data and the data's playing out.

Yeah.

And all the data we're seeing is converging to this, this answer, this, you know, eventual thing.

Like we saw a report yesterday on just E commerce and who's gaining the share in E commerce that Mercados put out and it was saying the same thing, the same people are winning.

Walmart, Aldi got highlighted in that too.

And close us out here, what are your thoughts?

I think price is the biggest concern.

Like I think you have to be making sure that you're investing to make sure that your pricing is competitive in those areas.

And the second thing I would say is content creation.

Like I think that even though you're a regional grocer, I think it's important to be thinking about how you're finding those news, new consumers and connecting with them.

And I think of you know, creating video or creating other, like other types of engaging content that will show up in some of the places where Gen Z is too.

Because they don't know about you.

Like unless you know Walmart, Target, Amazon.

Like these people are investing in creating content, capturing interest, sending out recipes, being, saying we have the trending product that you're talking about on Tik Tok.

Like they're investing in those areas and there are partners that I think these regional grocers can find to help do that so that they remain relevant.

Because like you said, you know, then the research showed they're, they're, they're having this consistent audience across, you know, boomers and even some older Gen Xers, but that's going to go by the wayside.

So I'd be invested in how am I creating content so that I show up for these audiences that are coming into the market in the places that they're spending the most time.

That's a great point.

It calls to mind what was it, was it stop and shop that was doing the kiosks for the mobile couponing in store, you know, and like, who's your muse as you're designing this?

Is it the silent generation that's probably likely to use that kiosk?

Or is or are you, you know, putting your resources towards what you're going to be in the future and what you want to be?

That's a great point, Anne.

All right, let's go to headline number five.

Shopify is setting boundaries for AI agents on its merchant sites.

According to modern retail, Shopify is drawing a line in the sand on agentic AI, the type of bots that autonomously complete tasks on their own without human input.

With new language across merchant websites that appears aimed at blocking agentic AI systems, Shopify now includes a warning in their code that powers merchant storefronts, telling bots what they can and can't do.

The message appears in each site's robots txt file, a standard tool websites use to give instructions to automated crawlers like search engines.

The new line states, quote, automated scraping buy for me agents or any end to end function flow that completes payment without a final review step is not permitted.

End quote.

The move, however, is not likely an outright rejection of agentic AI.

The language direct.

The added language directs legitimate integrators to use its official checkout kit.

In other words, the change shows Shopify is thinking ahead, drawing early boundaries between controlled integration and unregulated automation.

Shopify merchants could theoretically override the robot file as Shopify is a content management system.

In other words, the change shows Shopify is thinking ahead, drawing early boundaries between controlled integration and unregulated automation.

But the default settings suggest the platform is trying to protect its ecosystem by discouraging unauthorized AI scraping and checkout information.

David, we're going to ask you a more top level question here.

I won't ask you about robots txt files, but our retail boardrooms giving enough attention to agentic AI.

Or is Shopify ahead of the curve and trying to curve AI bot activity on its properties?

So a couple things here and one, I think this is the best news I have heard this year from a shop.

Yeah, yeah, I'll tell you why, like if you, you know, try to book a reservation in New York City for any restaurant that's worth going.

If you, you want the latest collab with, you know, Adidas and Bonner, or, you know, pick any collabs that are out when they drop.

You want to try to buy concert tickets on the day of release, you can't do any of that anymore.

As a person that is sitting in front of a computer and waiting for 10am and then clicking.

Right.

It just doesn't happen.

Right.

Because all of the bots have completely taken over.

So I actually think this brings some validity back to the online shopping experience and allows humans to participate, which I think is, which is a great thing.

To your broader question.

I think boardrooms are starting to pay attention to agentic AI in a lot of different ways.

Right.

I think it's very analogous to almost the outsourcing journey.

We, you know, there's the commodity stuff you can do with, with agentic AI of data aggregation and, and things like that and, you know, and like automating certain things or eliminating certain things.

I think it's really tip of spear stuff.

And very few people are doing really cool pricing, personalization, merchandising stuff yet because they a, the skill set is outrageously expensive to hire right now because there's not enough of it.

So you're only seeing kind of the largest players primarily in the tech space that are kind of really pushing the envelope.

I think retailers are a step or two behind the curve, but I think they're starting to realize that they are a step or two behind the curve.

And the next couple years are going to be interesting to see A, the talent war and then B, how that talent is deployed to, to help retailers.

Right.

Well, certainly a reason, I think, like you said, I thought this was the, one of the most intriguing stories that we had this week on the Fast five, but certainly something that, you know, is going to push hopefully more retailers to start putting more focus on this as a priority for them.

Chad, where do you, where do you sit on this?

Are you, are you feeling like this is being talked about enough in boardrooms that you're sitting in?

Well, I think there's probably lots of talk in boardrooms about agentic AI, but maybe not from the, I don't know, kind of ethical or perspective that Shopify is coming at it.

Right.

So it's about commerce maximization and I do think Shopify is ahead of the curve in terms of thinking about that activity.

Right.

I mean, this raises huge questions around enforceability and legal consent.

And E commerce.

And personally to me I'm all in favor for slow playing AI in places where AI decision making imposes risk.

I mean I love the idea of it.

Right.

I mean the consequences of allowing AI free reign to make mistakes or whatever the ramifications, like it can cost a lot of money at the very least piss a lot of people off.

So there is a spectrum in terms of, in its development how AI should be used in decision making.

Right.

And as David said, you know, the super repetitive lower risk, quite frankly, if there's little for the human to add.

Yeah, let AI run wild.

Right.

But in these cases where either AI can err or it, it provides an imbalance in the market so either around what the AI will do, so it's a risk based decision or you know, if there's something that a human can add to the decision or execution, so more of a value based decision.

We, we need the human intervention at least until, you know, we're developed at that point and Shopify is saying that's the case for the gentic AI and frankly I'm not going to push back on that.

Yeah, I mean I think it, you make a really good point, Chad.

And I think it, it just re emphasizes how important this is because I think we, we have to all be agile and ready to react and adapt our businesses to, you know, to be, you know, in a position to change if we need to based on how search is going to be happening.

I mean, I think we look at how Amazon was doing this.

You know, you, you could shop aloe yoga and buy a bra on Amazon even though they weren't in the, in the Amazon marketplace.

I think it's going to be really important for all brands, all retailers to focus on how this is going to continue to shift and then how search behavior is going to shift as a result.

But, but Chris Walton, close us out.

Oh my God.

Yeah, I've got a lot of, a lot of thoughts on this one.

I mean I think, you know, if I look at, from the executive perspective, the first question I ask myself is why do we allow any of this?

You know, why do we allow bots to come in and scrape pricing?

Like if I'm Walmart, why do I want my pricing out in, in the, the, in the, in the Internet sphere?

Like why does that, why do we allow that to happen?

And so then I start thinking about the lobby efforts across the retail industry and I'm like, like, you know, we're spending all this time lobbying for credit card processing fees.

Why aren't we lobbying for regulation to, you know, limit bot activity or to control bot activity in some way, shape or form?

So that's one question.

But given that there's an absence of that, then the bigger question for me is how does what we're talking about evolve?

And my gut tells me that the agentic AI platforms are going to start, it's going to become Marketplace 2.0, and those agentic AI platforms are going to get a cut of the revenue directed from those retailers that ultimately allow them to plug in simply and easily.

It won't be everybody, but it's going to be some of them.

And so the task list for me, if I'm a CEO or, you know, I'm in that boardroom trying to say, how do I do this?

Is I have to ask myself, what am I okay with getting scraped and what am I not okay with getting scraped?

Like, do I want agentic agents on my site checking out for someone without my, without that customer ever entering into my property?

My, my guess is they, a lot of people probably don't.

So then it comes down to what's it going to cost for me to prevent certain information from getting transmitted that way?

I don't know the answer to that.

I don't even know if it's even possible.

But those are the discussions you've got to start outlining what are we okay with, what are we not, and then go from there, in my opinion.

Yeah, and not just the, the economic costs, but what are the costs if the customer can't purchase?

Like, are you going to see a reduction in shop, in customer shop spend or awareness of your product if you're not allowing that activity to.

You don't get the first party data.

You don't get anything that you're used to getting.

There's a lot of costs that come with allowing sites or bots to scrape you in ways that you're not ready for.

Right.

All right, you guys, let's close it up with the lightning round.

Chad, you get question number one.

Morrisons recently announced that it will limit which colleagues it allows it in its stores, back rooms to prevent what they're calling, quote, idling and promote more service on the shop floor.

Did you ever idle in a stockroom back in your early career days, Chad?

You know, my, my first real job was I worked at a grocery store in the grill area when I was in high school.

Chef's hat and everything.

Yes, I was the panini king.

You know, there were likely.

There were, there were likely some times that I Idled in the back, maybe took a stroll through the, you know, refrigerated cooler room.

And I didn't want to maybe be next up for a customer order, you know, if I got through a lunch crowd or something.

So.

Yeah, probably prone to happen a few times.

My gosh.

Played some games with this pricing sticker gun behind the scenes.

Sure, I see what you're doing there.

All right, next one.

Call her daddy.

Host Alex Cooper got booed mercilessly for her rendition of Take Me out to the Ball Game at Wrigley Field last week.

David, I'm guessing you, you saw the video of this.

So if you were to serenade the crowd during the seventh inning stretch, how would you handle it?

Would you straight sing it or would you ham it up?

Yeah, you know, well, hey, I'm the world's worst singer, so I would never get asked to.

To sing it, but I think I'd have to go very.

It's one of the great traditions and it's so classical.

I.

So I. I think you gotta go straight sing it, engage the crowd and, and do it by the book.

It's the only other.

Otherwise you.

It's just way too risky.

Right.

And it's not as much fun.

Yeah.

All right, David, you get question number three as well.

Nextdoor just announced that they're re platforming with the help of AI to focus on more real time news and safety updates for neighbors and cut back on the cranky neighbor posts.

Have you ever posted on the app and if so, why?

And extra points here.

If it was to shut down one of those cranky neighbors.

Yeah.

So a little embarrassed to admit this, but I'll admit it anyways.

Are you the cranky neighbor?

I am not the cranky neighbor, but I have shut down a cranky neighbor.

Oh.

Using my wife's account.

Oh, okay, nice.

Without her authorization, of course.

Which when it was found out, did make me contribute to the luxury goods market as.

As a doghouse to get myself out of the doghouse.

But yeah, I actually think it's a really good thing like that they're re platforming.

Wow.

Great story, David.

God.

Yeah, I 100 agree.

All right.

An influencer, Mia Zilou.

I think I'm pronouncing that name.

Right.

An AI powered social media star who has amassed over 150 Instagram followers by sharing sexy pics of herself at various tennis events.

Took Wimbledon by storm last week.

But there's a catch.

If you caught that Mia is not real.

She is 100% AI generated.

I looked at the photos and I cannot tell the difference, folks.

Chad, how long do you think before AI influencers start popping up inside of retail stores like actual shoppers?

I.

And I'm.

Well, I guess I'm glad that you're asking me a more professionally oriented question related to this could have gone in.

So many directions otherwise.

I don't even know what I would say.

Like, you know, do we get sexy AI and Lululemon?

What does that mean?

I.

Listen, I. I don't actually think AI modeling is that far off.

Honestly.

The economics of cutting down and marketing, creative and photo shoots and all, like the first ones who do it are going to get some, you know, public backlash for sure.

But I think it'll be short lived and this actually will happen.

Yeah.

Wow.

Yeah, it's probably, it's probably closer than it appears.

The objects in the mirror are closer than they appear.

Is that what you're saying, Chad?

But closer than maybe we'll realize, given that no one even knew that this per, you know, that this person, that this wasn't a person.

So I honestly could not tell the difference.

All right, well, that closes us up.

Thanks for a great show.

You too.

Happy birthday today to Fatboy Slim, Corey Feldman and to the man who helped us all wonder if there is enough time on Saturday to go to Home Depot and Bed Bath and Beyond in the same day, the incomparable Will Ferrell.

And remember, if you can only read or listen to one retail blog in the business, Make It Omnitok, the only retail media outlet run by two former executives from a current top 10 US retailer.

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Wherever you happen to listen to your podcast or on YouTube, you can watch this episode in its entirety by Simply going to YouTube.com Amitalkretail Chad, if people were listening, they want to get in touch with the A and M consumer and retail group.

Pick your brains, you and David's brains about anything that's on their minds.

What's the best way for them to do that?

You can always learn more about us and our practice at Alvarez and marsal-crg.com find us on our LinkedIn @ Alvarez and Marsal Consumer and Retail Group.

But because we're so gosh darn approachable, feel free to reach out directly to David and I.

And happy to.

Happy to connect.

All right, well, thank you again to David Brown and Chad Lusk of the A and M Consumer and Retail Group for joining us, as they do every month.

And on behalf of all of us at Omnitalk Retail, as always, be careful out there.